Thanks to our friends at Capitol Home Lending for this great information.
Kim Lambert 613-859-3419 Peter Rostocki 613-355-9493
Understanding Credit Bureaus.
Financial information on your credit report
Your credit report may contain the following financial information:
- non-sufficient funds payments, or bad cheques
- chequing and savings accounts closed “for cause” due to money owing or fraud committed
- credit you use, including credit cards, retail or store cards, lines of credit and loans
- bankruptcy or a court decision against you that relates to credit
- debts sent to collection agencies
- inquiries from lenders and others who have requested your credit report in the past three years
- registered items, such as a lien on a car that allows the lender to seize it if you don’t make payments
- remarks, including consumer statements, fraud alerts and identity verification alerts
Your credit report contains factual information about your credit cards and loans, such as:
- when you opened your account
- how much you owe
- if you made your payments on time
- if you missed payments
- if your debt has been transferred to a collection agency
- if you went over your credit limit
- personal information that’s available in public records, such as a bankruptcy
What to look for on your credit report
Lenders use codes to send information to the credit bureaus about how and when you make payments. These codes have two parts: A: a letter shows the type of credit you’re using and B: a number shows when you make payment
You may see different codes on your credit report depending on how you make your payments for each account.
WHAT DOES THE LETTER MEAN?
You borrow money for a specific period of time. You make regular payments in fixed amounts until you pay off the loan.
You may borrow money when you need to, up to a certain limit.
You may borrow money up to your credit limit on an ongoing basis. You make regular payments in varying amounts depending on the balance of your account.
WHAT DOES THE NUMBER MEAN?
|0||Too new to rate. Approved, but not yet used|
|1||Paid within 30 days of billing. Pays as agreed|
|2||Late payment: 31 to 59 days late|
|3||Late payment: 60 to 89 days late|
|4||Late payment: 90 to 119 days late|
|5||Late payment: more than 120 days late, but not yet rated “9”|
|6||This code isn’t used|
|7||Making regular payments using one of the following debt management options: a consolidation order, orderly payment of debts, consumer proposal. Debt management program with a credit counselling agency|
|9||Written off as a “bad debt”. Sent to collection agency. Bankruptcy|
Order by telephone
the credit bureau and follow the instructions
Tel: 1-800-663-9980 (except Quebec)
Tel: 1-877-713-3393 (Quebec residents)
- Equifax Canada
- Confirm your identity by answering a series of personal and financial questions
- You may also need to provide your Social Insurance Number and/or a credit card number to confirm your identity
- You must receive your credit report by mail
Add a fraud alert
A fraud alert, or identity verification alert, tells lenders to contact you and confirm your identity before they approve any applications for credit. The aim is to prevent any further fraud from happening.
Ask the credit bureaus to put a fraud alert on your credit report if:
- you’ve been a victim of fraud
- your wallet has been stolen
- you’ve had a home break-in
You may need to provide identification and a sworn statement to prove that you’ve been a victim of fraud.
You can set up a fraud alert for free with Equifax. TransUnion charges a fee of $5 plus taxes to set up a fraud alert.
Generally, negative information stays on your credit report for 6 years. However, certain information may remain for a longer or shorter period of time. Negative information can hurt your credit score.
Negative information can include:
- missed payments on a debt
- bounced cheques
- accounts that were sent to collections
A judgment is a debt you owe through the courts due to a lawsuit. For example, if somebody sues you and you lose, then the debt may show up on your credit report.
Usually this information stays on your credit report for 6 years.
However, TransUnion keeps this information on file for 7 years in the following provinces:
- New Brunswick
- Newfoundland and Labrador
TransUnion keeps this information on file for 10 years in Prince Edward Island.
A consumer proposal is a legal agreement set up by a licensed insolvency trustee. The trustee creates a proposal for your creditors where they agree to let you pay off a percentage of your debt.
Equifax removes a consumer proposal from your credit report 3 years after you’ve paid off all of the debts included in the proposal.
TransUnion removes a consumer proposal from your credit report either:
- 3 years after you’ve paid off all of the debts included in the proposal, or
- 6 years after you sign the proposal (whichever is sooner)
Generally, both Equifax and TransUnion remove a bankruptcy from your credit report 6 years after the date you’re discharged.
TransUnion removes a bankruptcy from your credit report 7 years after you’re discharged in the following provinces:
- New Brunswick
- Newfoundland and Labrador
- Prince Edward Island
If you declare bankruptcy more than once, then the bankruptcies will appear on your credit report for 14 years.